LONDON (Reuters) – A pilot project by online giant Amazon and two exchanges showed how equity trading moves from expensive physical servers for cloud computing could save money and reduce the potential for outages, the companies said Friday.
Singapore Exchange SGX, London-based Aquis Exchange, and Amazon Web Services said they have undertaken a proof of concept to demonstrate that stock trading in the cloud can be fast and reliable enough.
“He has proven he is technically capable,” said Adrian Ip, a director of the technology division of Aquis Exchange.
Exchanges that use the cloud to date for trading are limited in size or niche, such as trading in crypto assets, Ip said.
Amazon’s move to “multicast” or the ability to send data to many parties simultaneously in the cloud, a prerequisite for any size exchange, was a step forward, Ip said.
Although the exchanges have spent millions of dollars on physical backup servers, this year there have been outages in Japan, Australia and Euronext in Europe, attracting close scrutiny. from regulators.
A cloud-based exchange could be more resilient than relying on a physical infrastructure distributed across all regions, Ip said.
Mayumi Hiramatsu, Vice President of Amazon Web Services, said the pilot project showed a path to freeing customers from maintain legacy on-premises infrastructure.
Aquis and SGX are studying how to take the results forward from their pilot project with Amazon, which they believe could lead to savings of up to 90%.
“We will see how this can be scaled down globally. We will take a thoughtful and measured approach and discuss with regulators and members, “Ip said.
It comes at a time when regulators globally are also looking more closely at how financial firms are increasingly relying on third-party cloud providers like Amazon, Google, and Microsoft for critical services.
The European Union wants to be the first to introduce new laws to regulate this use of the cloud.
Reporting by Huw Jones; Editing by Kirsten Donovan